Problem 2 (Supplemental Problem #2)- Activity-based costing versus Lovehace Company produces only two products reading glasses and sunglasses. The cost system and overhead costs are currently allocated hours. Outside cost consultants have recommended that the company use activiy-based cos overhead to products. reading glasses and sungasses. The company uses a normal using a plant-wide overhead rate based on direct labor to charge The company expects to produce 4,000 reading gasses and 8,000 sunghsses this year. Each par o glasses requires two direct abor hours to produce and each pair of sunglasses requires one-ar hour to produce The direct material and direct libor costs per unit are as folows Direct Material (per unit) Direct Labor (per unit) S Reading GlassesSunglasses 30.00 S 16.00 $ 17.00 4.00 Estimated total fictory overhead data for the year is as follows: Activity Production setups Material handling Packaging and shipping Total factory overhead Budgeted Overhead ReadingGlasses 5 setups Total 20 setups Sunglasses 80,000 70,000 120,000 270,000 15 setups 1,000 lbs. 4,000 lbs. 5,000 lbs. 4,000 boxes 2.000 boxes 6,000 boxes Required: 1. Cakculate the total product cost per unit of each product using a plant-wide rate based on direct labor hours: Reading glasses Sunglasses 2. Cakuate the activity cost rates for the following activities: (a) Setups (b) Material handing (c) Packaging and shipping 3. Calculate the total product cost per unit of each product using activity-based costing: Reading glasses Sunglasses ** The next page has been le ft blank to solve Problem 2**